Runninghead:WHATMAKESANEFFECTIVELEADER
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WhatMakesAnEffectiveLeader
Maria Belen Rivera Perez
BUSI690-001
Professor Koss
LibertyUniversity
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ManageGlobalBusiness
Leaders must maintain a global focus. Leaders need to be able to identify the unfolding
opportunities and challenges in the global market. These individuals are called to identify and
manage characteristics of the global market that could certainly be intimidating, yet very
rewarding. International flows are generally distinguished by geographical distance as well as
cross-countrydifferences(Ghemawat,2012).Accordingtoasurveyofhighermanagement,76%
executives mention their organizations need global leadership competences, but only 7% think
they are currently doing so effectively.Also, 30% of U.S. based companies admit that they have
failedintheinternationalmarketbecauseofinsufficientproficientpersonnel(Ghemawat,2012). While
global leadership is a promising field, common misconceptions of it have led to companies
incorporating myths or half-truths:(1) my company, atleast, is global, and (2) global leadership
is developed through experience.
MyCompany,AtLeast,IsGlobal
Leaders with great global business capabilities have to foster international interactions
andtailortotheintegrationofallmarketsegments.Manylargemultinational organizationsstate that
their interactions are not integrated but their firm is. This claim justifies the idea that many of
these MNEs remain quite domestically rooted.According to Rugman, and Verbeke (2004), they
state that less than 2% of MNEs Fortune’s Global 500 list of the world largest and most
profitable companies derives more than 20%of their revenue from the NorthAmerica, Europe
andAsia segments (Rugman, &Verbeke, 2004).Very few MNEs have the ability to sell a
standardized product and service to international markets; however, some do succeed. For
instance, a truly global MNE is Coca Cola.At the time of the research, Coca Cola was ranked
129thintheFortune500list,andhadover20%ofitssalesacrossallthreesegments(Rugman,&
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Verbeke,2004).TheAmericanmultinationalbeveragecorporationhad38.4%,22.4%,and24.9% of its
sales in NorthAmerica, Europe, and Asia
Furthermore, leaders need to identify and appreciate the real facts. It is invaluable to
embrace one’s rootedness to become global citizens. Leaders have to consider that trust is
inevitable and it diminishes with the farther away a country is. For instance, research conducted
inWesternEuropesuggeststhatemployeestrustpeoplefromtheirowncountrytwiceasmuchas they
trust outsiders, and this level of trust declines with people farther away (Rugman, &
Verbeke,2004).Anothercentralvaluablefacttoleadersisinformationflows.Peoplegetasmuch as 95%
of their daily news from domestic sources, which are mostly devoted to national stories
(Rugman, & Verbeke, 2004).Another interesting fact is that 98% of telephone-calling minutes
and 85% of Facebook friends are within the national borders (Rugman, & Verbeke, 2004).
Effective leaders need to embrace their rooted cosmopolitanism by nurturing domestic values
andbranchingouttoconnectwithcounterpartswholikethemselves,valuedomesticplacesand cultures.
GlobalLeadershipIsDevelopThroughExperience
Leadership scholars have argued that leadership experience determines whether an
effectiveleaderwillbesuccessfulintheglobalmarket;however,whileexperienceisrequired,it is not
sufficient for the success of a global organization. Most senior executives and CEOs tend
toleadmoregloballivesthanmostofthepopulation(Rugman,&Verbeke,2004).Ifexperience alone
where to be the keyto successful global businesses, manyleaders would not need to learn
anything from their jobs. Because this is not the case, senior executives and CEOs can fit their
personal experienceand blend it with accurate global perspectiveand hard data.Agood starting
point for effective leaders is to read and learn on the magnitude and patterns of international
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interactions within the company’s industry.Another conceptual learning would be for global
leaderstoundertakeanexaminationofcross-countrydifferencesandtheirrespectiveeffects.By
applyingtheseconcepts,effectiveleaderscangloballymanagebusinessesandcreateaprofitfor the
organization as well as shareholders.
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References
Ghemawat,Pankaj.“Developinggloballeaders.” McKinsey&Company,June2012,Retrieved from
www.mckinsey.com/global-themes/leadership/developing-global-leaders
Rugman,A., and VerbekeA. (2004).Aperspective on regional and global strategies of
multinationalenterprises.JournalofInternationalBusinessStudies,35(1),3-18. Retrieved
from http://ezproxy.liberty.edu/login?url=https://search-proquest-
com.ezproxy.liberty.edu/docview/197132955?accountid=12085
